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Summary:
Federal R&D funding priorities change over time, reflecting Presidential and national preferences. Defense R&D predominated in the 1980s, decreasing to about 50% of federal R&D in the 1990s during the Clinton Administration. In nondefense R&D, space R&D was dominant in the 1960s as the nation sought to compete with the Soviet Union; energy R&D became an additional priority during the energy-short 1970s, and, since the 1980s, health R&D has predominated. Defense R&D has started to dominate again as priorities have shifted to deal with the war against terrorism. The FY2003 budget request seeks to increase R&D funding by about 8% overall, including increases for the Department of Defense (DOD) and National Institutes of Health (NIH). R&D funding would increase also for the Departments of Education and Veterans Affairs, and EPA, NASA and NSF, although some of these latter increases are due to program shifts and new methods of counting programs that were not formerly counted as R&D. R&D funding would decrease in the Departments of Agriculture, Commerce, Interior, Transportation, and other areas. If the 16% increase in NIH R&D funding were not counted, civilian R&D funding would fall by 0.2%. Counter terrorism R&D funding is requested to double to about $3 billion. National R&D funding continues to grow, but the federal R&D share, while surpassing the previous peak of 1992 in constant dollars, has declined to 27% of the national total. Scholars and policymakers cite the importance of R&D funding to economic growth. Debates focus on whether federal R&D should be increased across the board; how priorities should be set; and how to determine "balance" in funding between health and nonhealth fields. Legislative priority-setting initiatives include bills to double the NSF budget within 5 years (H.R. 1472); and to make permanent t he research and experimentation tax credit, including credit for industrial support of academic basic research (H.R. 1137, H.R. 1329, S. 41, and S. 515). The Bush Administration included in its budget request a "Federal S&T" budget, which may presage a future unified science and technology (S&T) budget. The FY2003 budget also requested funding for four interagency R&D initiatives, in contrast to the ten initiatives in the FY2001 budget. Other proposals to coordinate R&D include a continuing priority-setting mechanism; a cabinet-level S&T body; functional R&D budgeting; elevation of the status of science decision-making in t he Department of Energy (DOE) and EPA (H.R. 64) to, among other things, promote physical sciences; and reestablishment of the Office of Technology Assessment in Congress (H.R. 2148) or a Science and Technology Assessment Service (S. 517). The Administration opposes earmarking for R&D, which it said totaled about $1.8 billion in FY2002 and because the practice distorts agency priorities. The Administration has started to use some performance measures for R&D budgeting, inspired by the Government Performance and Results Act. However, the Administration and critics say better data and concepts are needed to use performance budgeting for basic and applied research. OMB judged agencies that fund R&D using performance management measures, with NSF winning accolades for its financial management procedures.
